Singapore cooling: Mortgage loans could drop up to 20%

By Romesh Navaratnarajah: Singapore's broad range of new property curbs is an indication that the government is willing to trade off economic growth for social issues, said DBS Chief Executive Piyush Gupta (pictured).

The official forecast for GDP growth this year is between one and three percent and Gupta believes that Singapore will likely perform in the bottom end of the range.

This as the government puts social priorities ahead of the economy, as seen in its latest restrictions that "are likely to have a lot more teeth than anything we've seen so far".

"You don't have to be terribly prescient because they've been making it very clear now - for some time - that they're willing to trade off growth for what they call sustainable growth. Which means they're willing to trade off growth for social harmony."

Meanwhile, there could be a significant decline in mortgage loans for 2013, according to DBS' chief.

"I think there will be a slowdown because of all three things - higher cost to property, lower loan to valuation ratios and higher debt burden ratios."

"Rates are still at historic lows, so we've to balance a lot of money available with low rates, because of all the measures. So it's tough to call how much the slowdown will be."

He expects a drop of between 10 and 20 percent "on a sustained basis in terms of mortgage loans". Romesh Navaratnarajah, Senior Editor of PropertyGuru, wrote this story. To contact him about this or other stories email romesh@allproperty.com.sg Related Stories: UK mortgage to become cheaper: Fitch

US mortgages still near record lows

HK's hot market could impact home loans

More from PropertyGuru:
UK mortgage to become cheaper: Fitch
US mortgages still near record lows
HK's hot market could impact home loans
US housing activity to heat up